The
State of the Industry 2015: After a Big Leap Forward in 2014
Experts Think the New Year Will Be Even Better

By Ron
Jackson

Welcome to
DNJournal.com's 11th annual State of the Industry
Cover Story! As we have done at the start of each new
year for more than a decade now, we have called upon leadingexperts from across the various sectors of the
domain industry to give us their perspective on the most
important developments of the past year, as well
as their forecast for the year ahead.

A dozen major
players from the fields of domain investing and
development, monetization, brokerage, registry
and registrar operations and
domain law

took time out of their busy schedules to
share their thoughts with us. As always, to keep things fresh we called on a mix of
previous and new contributors to assemble an all
star line up that will give you some great
insight into where we've been and where we are headed
next. We have a lot of ground to cover - so let's
get right to it by introducing you to our
esteemed 2015 panelists.

Our primary audience
has always been the domain investing and development
community, so we will start with four very well-known
representatives from that sector. All of our panelists agreed that
the introduction of new gTLDs was the most significant
development in 2014 so we will follow with four experts who are
active in that space, from Donuts Co-Founder Daniel
Schindler to Sedo.com CEO Tobias Flaitz, whose
company crosses many boundaries including PPC monetization and
aftermarket sales (all of which Tobias comments on). With
aftermarket sales replacing domain parking as the most important
revenue stream for many portfolio owners we will then segue into
key players in the brokerage space, Tessa Holcomb and George
Hong and a major figure in domain monetization, Rook Media Co-Founder
Daniel Law. Finally, none of your assets are going to do
you any good if they are stolen or lost through a URS or UDRP
action, so attorney Karen Bernstein of BernsteinIP.com
will take us home with some thoughts on that.

Several
of our experts have a foot in multiple sectors including legendary
domain investor Frank Schilling. Frank has also
become a leading domain services provider through sales
platform/brokerage DomainNameSales.com and new gTLD registrar/registry
operator Uniregistry.com. Since Frank has first hand
experience in everything from making a fortune with .com
domains to trying to build an even bigger one with new gTLDs,
we'll have him get the ball rolling.

Unrelenting growth in 2014
was the biggest surprise. 2014 was an unusually
strong year - very surprising to me. It was a real shift
and the sales team at DNS/Uniregistry did an exceptional job
serving that growing marketplace for secondary market resale
domain names. Second most surprising was the slower
uptake of new gTLD SLD's (second level
domains). Skeptics were everywhere in 2014 due
to the past roll-out of lackluster strings like .biz
and .name and others, and turf-protection skeptics
unsettled by the value-risk to their existing namespace
domain portfolios, created an anticlimactic buzzkill vibe.

I think new gTLD operators like
Uniregistry were too close to their product in 2014.
We have been living and breathing new gTLDs since 2011, so
the official launch in 2014 was the end of a 3 year relay
for us, and we were surprised that the consuming public and
other registrars were not standing there eagerly to take the
baton and run forward with the same zeal that it took us to
get that baton to them. That is going to absolutely
change in this year because

the price of punting
in new SLDs is so laughably low
and the reward is so high. 2015 and 2016 are going to
be the years of dot anything and the bloom is going
to be more and more on this rose as people and retailers wake
up and smell the opportunity and difference of
“better” names. Hardly anything has happened
yet. .Com will still go strong but the bigger growth
and uptick in values (like from $0 gaining overnight to
$5,000) is in the resale market for new gTLD domain names.

Looking
ahead to 2015, I am getting worried about thebroader
economy again. Costs are up everywhere and returns are
low. It may not breakdown this year or maybe not till late this
year but the market is really rich and returns are low. This
is a great time to build cash and register registration
price new G’s in low cost, fixed price renewal namespaces.
That’s about all I’m doing. That and using Uniregistry’s
tools and secondary marketplace to get premium-price liquidity on
high end resale names.

Uniregistry
has a great system for boutiquing names and spinning straw into
gold. That system is going to get a lot stronger and better in
2015 and now is a perfect time to start moving your names into Uniregistry.com
to make more money reselling. If you’re a long time .com holder you
would be crazy not to start taking profits this year. I
love Rick Schwartz dearly, but he and I disagree that .com
names are all going up in price to the moon and forever.
It’s just not going to happen fast enough for most investor's
time horizons and there is a greater risk that your heirs or
trustees will fritter away the value of your portfolio during
succession to the next generation before prices go astronomically
high. So this is a year to let go a bit and sell.
I’m buying but I’m selling more and just looking to get
returns where I can.

Challenges
in 2015 are going to come from competition in the new GTLD
arena. Dropping prices are going to drive opportunity and
competition or consumers but it will be hard on some registries.
At some point, competition is going to put pricing pressure
on .com resales, but probably not this year. That said, remember
to get out of the room before it fills with smoke. If the
economy softens and everybody starts selling it becomes too
late to move to the exits and some folks will get trapped.

Within
3 years Google and Amazon are going to be big
retailers of domains. Within 5-7 years I think they will
be the biggest retailers. I think between here and
there you will start to see more of them in the retail market and
that is good for us all. More names = more opportunity.
I’m just not sure how that plays out in a softening economy so
I’m biasing more conservative right now.

Michael
Castello, who, along with his brother David, was
profiled in a 2006 DNJournal.com Cover
Story, has been one of the world's most successful
domain investor/developers for over a decade now. His $3.1
million sale of Whisky.com was one of three biggest
sales reported in 2014 and his development successes include PalmSprings.com
and Nashville.com.

Michael
Castello

Sale prices soared for
domain names especially .com in 2014. We also saw the
introduction of hundreds of new gTLDs, which had
opponents predicting the end of .com and proponents
predicting the overall failure of the new TLDs. In reality,
the industry grew on both fronts and an emerging
hierarchy that is indicative of a healthy future for web
addresses. I’ll also include NamesCon,
because it was such a successful event which evolved from
the new extensions. Anyone can have a “free” web
address. Those that attended NamesCon believe that a domain
name supersedes search. A domain name is not needed
if someone is using Google, Facebook, Wix or any
number of companies that offer searchable content. In
reality those companies are costing us our data,
privacy and security. People are realizing how important it
is for their future to own memorable web addresses
which advances our industry and profitability. It’s
an awakening that exponentially will continue and domainers
are at the forefront.

The buying public
likewise needs a clear and simple message. They want what simply
works. A memorable web address can pay big dividends to its owner
and a descriptive brand can save a company a fortune as the
internet becomes more integral to our future.

I’ve completely
lived off of domain names for 20 years. In a 2005 article,
I answered a question about the future: “In my opinion,
everything is going toward smaller, modular, wireless, hands free
and heads up. Picture the guy next to you on the train looking
through his heads-up sunglasses and making voice command
reservations through his high-speed wireless phone/computer. The
less buttons, the better. “

Understanding the
future and knowing what social impulses it will produce, will make
for a successful domain investor and the web addresses they
buy. We have to think out of the box. It is essential to
prioritize our assets and time without over reaching in our
abilities. Simply put; place your time were it is most
productive for your goals. If everyone is doing it, maybe there is
a more productive way to do it differently. Be creative and
find your own path.

Michael
Castello with wife Sheri and daughter Jessica
at the 2014 T.R.A.F.F.I.C. West conference in Las Vegas.

Virtual reality
will continue to grow into our live experience and we will become
more a part of it and it becomes us. Google and Facebook will
continue to wield great leverage until the geopolitical climate
changes and curbs its over-reach. In my opinion, Google is a monopoly
and has brought great losses to many smaller businesses by
creating a kind of class warfare within the first page of search
and obscuring web addresses and direct navigation. As one example;
simply searching for Nashvlle.com in Google produces
results for just the word Nashville, stripping away the TLD and
thus promoting its own advertisers. I believe that is an abuse,
especially if the user is trying to find Nashville.com. Likewise,
search algorithms have become an instrument of control; a sort of
reshuffling of advertisers to remind them who is in charge.
Hopefully that will soon change. Inevitably it will have to. Open
Source is going to play a larger role to balance and counter
these injustices. Our goal should be to survive with most of
our assets in place while not being overly exposed to risk.

In the next few
years, major corporations will have to pour more money into
competing with their heavy weight rivals OR they can be
creative and advertise with smaller niche businesses that can
upstream clients. Either way, it will be a war of attrition
and companies would fare better to conserve and not overspend
while trying to control their markets. That happened in the late
90s and it did not turn out so well.

If you are a
domainer and developer, do so in productive niche markets.
People are becoming more selective on where they spend their time.
They will do so with likeminded people who support their views.
Cater to them!

Braden
Pollock is one of those people who seems to have the ability
to be everywhere at once. He has built a premium domain
portfolio as well as many successful businesses, while also
finding time to moderate sessions and/or speak at all of the
leading domain conferences.

Braden
Pollock

I
think it goes without saying that the most significant
event in 2014 was the release of all the new gTLDs.
I can't think of a category in the domain industry that wasn't
affected by, at least, a ripple effect of all the new
strings. As domain investors jostled to find their place in
the new landscape, reallocating funds for the new strings,
the overall wholesale market for .com, .net
and .org has softened. I believe the entire market
has softened across the board with the only exception being
super premium names i.e. mid-six figures and up. This
is simply due to investors liquidating their current assets
to reallocate funds for new strings. Of course, this is
prior to any meaningful adoption from the end-user market.
Meaning, retail prices have remained unchanged or possibly
increased for premium .coms. Anyone focused on premium .com
domains as an asset class will weather this storm very well.

That
said, I believe some of the new strings are cratering the
value of long- tail .com, .net and .org. As an end-user with
a limited budget, what is a better name: CrazyHorseClub.com
or CrazyHorse.club? Assuming the general public
understands that .club is a gTLD then you can only assume
the shorter domain is the

better
choice. As for "premium" gTLD names like Divorce.Attorney
(my domain) and any other SLD+descriptive string, price
and availability will drive eventual adoption.

While
I've acquired some "premium" gTLDs through several
Founder's Programs (e.g. .co, .club, .attorney,
.lawyer, .co.com, .green), I'm most confident
in my high value .com acquisitions. The premium .com
domains are far less speculative than any new gTLD. I'm not saying
that the new strings aren't a good investment, I'm saying that the
jury is still out until there's mass end-user adoption. That
may take years.

For
those that are still chasing parking revenues, more power to you. Google
is not your friend! The ROI is in the appreciation of our
assets. Rule #1: Buy low and sell high.

In
2015 the dust will start to settle in the new gTLD landscape.
There will be a major consolidation in the registry space.
The big dogs will eat the little dogs. The large and well-funded
registries will start acquiring the mid-size and smaller
registries. We may even see a merger between two large
registries. Economies of scale certainly apply here and in a
couple of years there will be several massive registries with many
hundreds of strings. Make no mistake, the new gTLDs will be
very profitable – at least for the registries and their
stake-holders. In other words - buy Donuts stock when you
have the chance.

Another
prediction I'll make is that there are lots of end-users
out there that either don't care about the new strings or
are playing the waiting game. At the end of the day, they
will acquire the best domain that they can afford. And at the top
of the market, that will be a .com.

Larry
Fischer has been involved in some of the biggest domain sales
of all time - most of them subject to NDAs which is why you don't
see his name constantly in the news. But make no mistake, every
industry insider knows what Larry has accomplished and his vast
knowledge of the space (he and partner Ari Goldberger also
built a successful parking company, SmartName, that they
later sold to NameMedia).

Larry
Fischer

2014
was an extremely strong year for High Value Generic .coms.
The number of transactions along with sale prices that GetYourDomain
was able to achieve for clients was at the highest levels in
years. Industry specific, I have to say 2 notable
domain sales occurred in the Chat / Messaging market.
Chat and mobile are two of the hottest areas on the net.
The domains Chat.com
and Messenger.com
proved that having a strong .com related domain is as important
as ever for both large corporations and startups.

One
big trend was the meteoric rise in prices in 2
and 3 letter .coms along with 2 and 3 number .com's. Chinese
investors were largely responsible for the run up in prices,
but large Corporations were also realizing the importance of
short 2 and 3 letter .coms.

One
significant event in the industry was the rollout of many new
gTLDs. Early on, domain investors put money into
.Guru. As time went on .club, .xyz and .NYC
saw some serious investments. Wine.Club recently sold
for $140,000 at the Namescon auction. However

it's
a long road ahead for many of the GTLD registries and
only time will tell success or failure (remember Flowers.Mobi’s$200,000 sale?)

It
seemed that Domain Parking revenue continued to decrease
on a year to year basis. Some domainers have started to display
their domains for sale on pages designed for selling their domains
as opposed to parking pages that include PPC links.

Lastly,
Namescon
became a major force. The show was probably the best run
show this industry ever had. Over 900 attendees along with a
strong sponsor backing helped make it a roaring success.
Congrats to Richard, Jothan and Jodi and thank you for what you
have done for the industry.

Looking
ahead to 2015, I think it will be interesting to see how the
new GTLDs play out. Most end users have very little
understanding of what they are. In addition, very little marketing effort has been put into them by most of the
registries. Many of these domains have been purchased by domain
investors. If these investors do not have resales, many of
these domains will not be renewed. In addition,
the yearly renewal prices for some of the most premium
of the gTLDs can run from $10,000 to $60,000. not to
mention similar upfront initial fees.

Larry
Fischer closes so many big sales its a good idea to keep a
bottle of champagne
nearby to celebrate! (photo from the 2009 T.R.A.F.F.I.C Silicon
Valley conference).

I
see prices continue to increase this year on premium and
short 2 and 3 letter .coms. I predict this based on both
sales that have happened or are in the pipeline that I’m already
involved in. I also predict that the record for the highest price
domain only sale of all time will occur. Yes it will be a .com.
(but will it be under NDA?).

PPC
parking revenue will continue to decline in mobile RPC with the
upcoming Google changes but n all I look forward to the year
ahead!

Daniel
Schindler is the Co-Founder and EVP at Donuts.co,
the largest player in the new gTLD space having
applied for over 300 extensions, dozens of which are already
in operation.

The most
significant event, clearly, was the expansion of the
domain name system. For the first time in decades,
the industry established competition at the registry level,
introduced new and varied naming options, and brought fresh
choices to consumers. 2014 was a year of introduction
and building as registry operators introduced new gTLDs
and began building customer bases; 2015 will be the first of
many years of significant growth in adoption and usage.

There is a
tremendous opportunity to further make consumers aware
of the utility and availability of new gTLDs. Donuts,
and other industry colleagues, will be devoting significant
resources to educating the marketplace and increasing
awareness of these and other associated services.

Bhavin
Turakhia is a wildly successful serial entrepreneur based in
India who co-founded and sold industry giant Directi before
making a big move into the new gTLD space with his current
company, Radix Registry.

Bhavin
Turakhia

2014 was a
momentous year for us. The most significant event that
made this year an unforgettable one in our journey – we
went from being a registrar business to becoming Asia’s
largest registry business. It was a long time coming,
but I’m glad that the new TLDs are finally here.

My team has
been as excited about this as I have. We spent countless
days and nights researching and building our new TLD
applications for a period spanning almost 2 years. We
sincerely believed (and continue to believe) in the disruptive
power of new TLDs, and so we immersed ourselves in
tracking the progress of the program, supporting the program
vociferously at each step of the way. It is immensely
satisfying to see that effort pay off, Radix now owns the
rights to operate 7 amazing new top level domains - .Online,
.Tech, .Site, .Website, .Host, .Press,
.Space, and we continue to be in the running for several
more exciting ones including .Web, .Shop, and
.Music.

From the
perspective of the industry as a whole, I believe that the
advent of new TLDs has made

the registry business an
incredibly dynamic one. For several years, relationships
between the players in the industry were linear, registries
sold domain names (without the need for much innovation)
through registrars and resellers, who in turn marketed their
services to end customers. Registries today cannot afford to
ignore any player in the value chain. As a registry, we
recognize the necessity to engage with registrars,
resellers, affiliates, influencers, strategic partners, and
customers alike in order to build a brand that the end
consumer can identify with and trust. The need for innovation
has never been greater than it is now.

On the registrar
side of the business, I believe that consolidation is the
order of the day. My belief is strengthened by the rising number
of acquisitions in the industry of late, including EIG’s
acquisition of some of our businesses. Their expansion strategy
makes a lot of sense to me – they are now leading the industry
by successfully building a multi-channel, multi-geo, and
multi-brand presence. I believe that this trend will continue for
the foreseeable future.

About 500
new TLDs have launched in the last 1.5 to 2 years, and several
more are on their way. All of these are not going to be equally
successful – a tough battle lies ahead of us. By
mid-2015, most registries will have acquired the TLDs that will
form the core of their registry business for many years to come.

That said, I do not
think that the industry will become static in any way. We expect
consolidation even in the registry business. The “portfolio
registry” companies have a significant advantage over single TLD
registries, with economies of scale playing in. But stronger, more
passionate teams, with dedicated focus on their standalone TLD
will be what will drive these boutique single TLD registries to
become as valuable as any other TLD, if not more.

Bhavin
Turakhia (center) with his brother and business partner Divyank
Turakhia (left)
and Vaibhav Arya (right) at the 2008 T.R.A.F.F.I.C. West
conference in Las Vegas.

2015 is
going to be a big year for us here at Radix. We are part of
some hotly contested contention sets including .web and .shop,
which are likely to be settled. We are psyched about the prospect
of adding more exciting TLDs to our growing portfolio in 2015.
Though 2014 was significant in its own way, we foresee the next
year bringing a very different set of challenges. We are planning
an elaborate multi-pronged marketing campaign to create
awareness for our extensions, and the new gTLDs in general. Like I
mentioned before, we cannot afford to lose sight of any
stakeholders.

Amongst other
significant events to watch out for during the year, I believe I
would put GoDaddy’s forthcoming IPO, and the launch of Google’s
registrar business at the top of my list. All in all, the
industry will definitely continue to be in a transformational
phase, and innovation and adaptation would be two things that I
believe would serve all participants very well.

Paul
Goldstoneruns
one of the oldest domain registrars in DomainIt.com and
last year he made a unique moved into the registry space - but not
with a new extension. Instead, Goldstone used his .CO.COM domain
name as the foundation for a new .CO.COM registry.

Paul
Goldstone

When I think
of the coming year, I’m reminded of the mid 90’s
when I was just getting started in domains. Only a
very small percentage of people had heard of domain names
let alone knew of their potential, but as time passed,
domains slowly became more prevalent. At one point I
saw a domain on the back of a bus, the next week I saw a
couple of domains in a magazine, and of course eventually,
domains were on billboards, backs of buses, business cards,
magazines and everywhere else. That didn't happen
overnight, and neither will the adoption of new gTLDs,
but for some extensions.

As I've said
in years past (but it continues to apply in 2015), awareness
will continue to grow for the new gTLDs among Registrars
and consumers. Registrars (and to some extent
registries) will promote awareness to the public through
increased offerings, greater options, and consumer
education. As a result, new domain names will become more
mainstream through search results, marketing materials,
social media, and by visiting the websites of early
adopters.

In 2015 we're going
to see the industry make things simpler for consumers.
With the increasing number of TLDs, there needs to be an
emphasis on finding new solutions to ease the domain searching and
registration process to fit customer needs. Providing clear
information and methods for finding the perfect domain in a sea of
new gTLDS will help expedite growth.

Domains that end in
.com will continue to demand the highest prices in the
aftermarket while investors will pick up strong new gTLD domains
at rock bottom prices (AKA ground floor opportunities!) Not
all of those domains will increase in value but there is certainly
opportunity for good investments right now.

I can't speak for
all new domain extensions, but at .co.com we are already
seeing a surprising number of registrants actually developing
their domains, not just for parking or a landing page, but with
fully-fledged websites such as orbit.co.com, iteam.co.com
and anza.co.com. I believe this early acceptance and
usage among the general public is a trend that will grow
significantly in 2015.

As I've said in the
past, the growing demand for mobile-friendly products will
continue to influence the industry, especially new gTLDs.
Users will seek out new names in order to get shorter and
more targeted domain names for mobile businesses. Look for a
trend toward names that are easy to say/pronounce as reliance on
voice commands within search and mobile products increases and
wearable tech, such as smart watches, are introduced.

One thing is for
sure, that 2015 will be an interesting year to watch, as the
number of gTLDs grow, compete for market share, and end users
continue to adopt new domain names.

As
the CEO at Sedo TobiasFlaitz is closely involved in
almost every aspect of the domain industry from new gTLDs to
domain monetization to running a huge aftermarket platform that is
known around the world.

Tobias
Flaitz

2014
was a remarkable year for the industry and for Sedo. We
saw a high demand for premium names under .com
achieving record prices, and ccTLD domain
sales remained strong (.de was the second most
successful TLD after .com). New gTLDs entered the
market with new approaches and saw a very realistic start
and growth even though many players in the industry had way
higher expectations. Buy Now domain sales saw another
huge increase proving that buyers prefer to know the price
for the sake of a fast purchase. Did you know that Buy Now
domain listings at Sedo grew by almost 300% during
the last 4 years? 2014
revealed to the industry that in order to market domains
properly and leverage the business potential of the new
gTLDs and in general the extended domain space (including
.com/.de, etc.), industry players such as Registries,
Registrars and Service Providers like Sedo have to join
forces. Sedo has already begun this approach in 2014 and
will expand its global marketing activities together with
our partners to achieve a high-flying year in 2015. My
expectation is that 2015 is going to be a better
year for new gTLD registries and in general a good
year for the domain industry.

With
respecting to the marketplace and domain trading, our assumption
in 2013 that prices of .com
domains would increase in 2014, came true: both mean and
median prices saw an upturn and despite the introduction of
many new gTLDs there was still a high demand for premium names and
also exact match keyword domains. At Sedo, we saw a 25% year to
year growth rate of the .com median sales price. In addition,
a study
from CanIRank,
a SEO software company, provided a possible explanation for the
trending category of keyword domains: the study found that exact
match keyword domains still have a positive impact on
search engine ranking despite the fact that Google has recently
changed its algorithm.

Another
highlight that we saw in 2014 was an increase of domain trading
originating from China.
Since we launched our marketplace with all its functions and
services in Chinese, we saw a huge impact on domain sales
statistics, especially those originating from domain buyers within
China. Many of our new Chinese clients were focused on
purchasing LL.com or LLL.com domain names, domains
including numbers and so called PinYin
domains,
which was reason enough to add the Pinyin category to our domain
search engine at Sedo. This made it easy and accessible for this
audience to find the domains they were looking for right at their
fingertips.

Sedo’s Chinese
Country Management Team

The
competition in domain trading, specifically in the brokerage
sector, grew but only a few players were actually successful.
The market has an excess of for sale inventory and the challenge
is to get eyeballs on this and find buyers. Multi-Channel players
like Sedo do have a huge advantage over Single-Channel
organizations.

ccTLDs continued to experience sales growth and proved that that they
will remain successful: domain sales such as kaffee.de for €100,000
or chat.fr for €99,999 are prime examples of this
feat. Now more than ever users are more likely to trust businesses
if they have their website presence under a ccTLD and they are essential
for any company’s expansion strategy. That’s why there was and
always will be a demand for domains under ccTLDs such as .de,
.at, .fr and many more. As for the Top 20 of ccTLDs,
there was a year to year growth in the median price of 13%.
According to
2014 DN Journal figures, Sedo is absolutely dominating the
ccTLD aftermarket. At the same time domain sellers benefit from
the global extent and vast reach of our platform.

New
gTLDs started off slowly in the beginning of 2014 but they eventually got
going in the right direction. Average sales prices are absolutely
comparable to Sedo’s experience and are hence in the expected
range (please see further below for more details). So far the
number of sales has been relatively small, i.e. compared to .com
and .de, but expectations need to be realistic and new gTLD sales
grew quite nicely over time with an upward trend. The trajectory
for better performing new gTLDs is very promising and supports
existing partnerships with new gTLD registries.

With
respect to domain parking, even
though in previous years the industry in general, Sedo
included, has seen a downward trend in the parking
monetization arena, 2014 was the first year where parking
earnings were stable. Our Mobile Traffic also
performed very well. In addition, we made modifications and
optimizations to our parking templates that were met with
much success and led to increases in productivity. The EPC
has recovered our
client base is consistently growing.

Looking
ahead to 2015,

we can expect to see some shifting when it comes to
the way premium domains are sold. Setting fixed prices
for names will be essential for successful selling.
At the same time, there will be almost no big change in 2015
when it comes to quality: consumers will still invest
in high premium names.

2015
will definitely be an exciting and eventful year for the
domain industry. This was already evident by the large draw of
participants at the recent NamesCon
in Las Vegas. And this was just a launching point for a wide array
of international conferences and events across various industries
that we’ll be participating in.

Improvements
to provide an even easier path to purchase premium domains
are a priority for us in 2015 as we continuously enhance the user
experience and drive more sales. Reaching end users still
remains one of our primary objectives and getting these user’s
attention and acceptance regarding domains is essential in order
to continue to grow premium and aftermarket sales. Our domain
sellers will benefit more when consumers that are unaware of the
aftermarket get an understanding of the importance of a good
domain name. Who can do this better than domain brokers? On
a daily basis they have to explain to companies why domains are
valuable. We definitely need to hire more of them in 2015,
so if you know of someone who would be a good fit as a broker,
talk to us!

Sedo.com
CEO Tobias Flaitz welcoming visitors to the company's booth
at the first NamesCon conference in January 2014.

In
2015 we can also expect to see the first considerable marketing
campaigns to use a new TLD domain which could be a
brand TLD or a gTLD. This is a crucial step in order to
gain momentum and increase the acceptance of new TLD domains for
end users. 2015 is also critical when it comes to Google and how
they will treat these new gTLDs in their search algorithms. These
facts combined with ongoing collaborative efforts between Sedo and
our Registry and Registrar partners will be even more important in
2015 to ensure that the TLDs remain successful. In addition,
businesses with city TLD domains such as .berlin or .vegas
may become prevalent since they already have a low acceptance
threshold. But
there is still so much that needs to be done in 2015 to thrust
domains into the public’s consciousness.

Lastly,
we are focused on our strengths that have led 2 million
clients to choose us as their preferred marketplace and partner:
providing a high performing marketplace that reaches 180
countries making it even more practical and convenient for all
parties to trade domains. Our roadmap for 2015 is full of tasks on
how to improve the domain trading experience for our sellers,
buyers and parkers and we are looking forward to introducing them
to this audience soon!

After
a very successful career as a broker at Sedo Tessa
Holcomb founded her own shop at Igloo.com where
she has continued to enjoy exceptional success, including several
7-figure sales.

It
was predicted that 2014 would be a year of
change for the domain industry and that it was!
From fruitful partnerships to exciting acquisitions and
significant staff changes to familiar faces returning to the
industry, 2014 left little time to get used to the norm as
there really didn’t seem to be any. And, although the new
gTLDs commanded so much of the domain industry’s
attention throughout 2014, they weren’t necessarily on the
forefront of our clients’ minds.

While Igloo did see some
interest in premium gTLDs from our client base, our focus
remained strong on selling and acquiring names on the
secondary market. On the acquisition side, the majority of
our clients were looking for premium .coms when it
came to building a brand or launching a new a new product.
Additionally, we saw significantly more requests to acquire
TMs, supporting ccTLDs and social media handles in
2014.

It’s no secret the Chinese
market has been on fire recently and although it’s
always been a strong market for Igloo, 2014 marked a huge
upswing in offer volume and price point from this region and
we’re definitely seeing that trend continue into
2015.

There has also been a renewed
interest and sales activity on the portfolio front. We saw
a increased number of requests in 2014 for custom domain
portfolios from investors looking to enter the market to industry
veterans interested in growing (or replenishing) their existing
portfolios. Portfolios ranged in type and were priced based on
quality and revenue and sold for as low as mid five figures to as
high as mid seven figures.

I predict there
will be more confusion in the new gTLD space in 2015. At
the rate that new gTLDs are currently being released, it’s
enough to make our head spin, let alone the general public!

As a
self-pronounced .com believer, I have to admit that even I shared
in the enthusiasm when Bill McClureboughtCoffee.Club (for $100,000) because it “just makes
sense.” However, while I love the fact that Coffee.Club has been
given the opportunity to shine, is it because it’s just a far
superior site than CoffeeClub.com or would it make a difference if
CoffeeClub.com were a viable competitor? Would it cause confusion?
Coffee for thought.

Along these lines,
Igloo is seeing an interesting swing in the pendulum that is very
much in line with a
post in TheDomains recently where Michael Berkens
pointed out that 51 out of 64 finalists in a startup competition
were using a .com. Igloo clients who registered gTLDs in
the past year to launch their business or product are now
contacting us for .com acquisitions. While they may not have been
ready to invest in the .com initially, once their business plan is
proven, etc., they are now finding the .com is necessary.
We’ve had several similar requests this month already and
I wouldn’t be surprised to see this trend continue.

I feel that
acquisitions will continue to be a significant portion of the
domain brokerage business. Buyers are realizing the benefits of
using an experienced broker to acquire their name, confidentially,
on their behalf rather than attempting it on their own. I
predict that, although we will see some compelling marketing
among the new gTLDs in an effort to attract new users, we may
not be as far along as one would hope or expect this time next
year. I believe the value of the .com will continue to hold
strong and that we’re going to see some blockbuster sales
take place this year. Lastly, I think we can expect to see more
consolidation and movement within the industry.

The collaboration
and undeniable energy and at NamesCon provided the perfect
start to the new year and reminded me how fortunate we all are to
be part of such a dynamic yet generous group of people. Overall,
my outlook for the domain industry in 2015 is extremely
positive and I’m happy to report that we are already seeing
the sales to support that. We are especially excited here at Igloo
to be putting the finishing touches on our new marketplace and
can’t wait to share our new look and feel. Stay tuned!

Philadelphia
based broker George Hong
has been one of the prime beneficiaries of the explosion in the
Chinese domain market. With his fluency in both Chinese and
English and his intimate knowledge of the markets in both
countries, George is uniquely positioned to facilitate sales
between buyers in the East and sellers in the West.

George
Hong

One
key trend in 2014 was seeing, due to strong demands
from Chinese domain investors, the value of short
domains, such as LL.com, LL.cn, LLL.com, NN.com, NNN.com and
NNNN.com, taking a big jump. For example, at the beginning
of 2014 there were some LL .com domains available for sale
at the 100K-150K level. At the end of 2014, It
was tough to buy any LL.com for under $500,000.

Another important
trend was domain investors buying domains from end
user (rather than selling to them). For example, in 2014
Schneider Electric, a Fortune 500 company, sold WX.com
and Hasbro, one of the largest toy makers in the
world, sold Game.com. Both buyers were domain
investors. Typically selling domains to end users
(especially large corporation) is a dream goal for domain
investors. Things are changing. Domain investors are willing
to pay more than end users in certain scenarios.

Important
events included the .CN Registry Auction at the
beginning of 2014/end of 2013.

Tens of thousands of premium
.cn domains were auctioned off. The auction attracted
end users and new domain investors along with experienced
domain investors. The auction gained a lot of media
exposure. It educated the public about domain
names and their values. Many of the sold domains went
up in value significantly by the end of 2014; which should
draw new money and investors into the domain market.

Looking ahead, domain
theft will be a major and growing concern. Domain name
owners should make domain name protection a part of their security
policy and take measures, such as watching out for phishing emails
& using two factor authentication email as registrant email,
to protect their domain names. Registrars that provide better
security services will gain more customers. Registrars that
don’t take security seriously or slow to react to domain theft
issues will lose customers. Smart registrars will enhance their
own security mechanisms and co-operate with each other to fight
domain hijacking.

With
respect to trends, the
demand for short and other highly liquid-able premium domains
(especially .com domains) will remain strong.
The value of these kinds of domains will continue to go up
in value in 2015. However, it will grow at slower pace
compared with 2014. The majority of short domains that
come to the domain aftermarket will be sold to Chinese buyers.

While
domain parkinghas gone through a widely-publicized slump
in recent years, Rook Media has managed to thrive and
gobble up previous competitors along the way. Co-Founder Daniel
Law, after previous stops at Sedo and NameDrive, has been a
key figure in their rapid rise to prominence.

Daniel Law

Last year, when answering the
question on what I saw as upcoming major changes and/or
trends for the monetization segment of the Domain Industry,
I felt somewhat like a guilty student who had acquired the
questions on an upcoming exam ahead of time. As is well
known now, at the timing of answering that question, I was
working feverishly towards bringing our acquisition of the DomainSponsor
business from Oversee.net to
a successful close, under strict confidentiality agreements.
So while not being able to talk about the specific
consolidation and maturation that I was specifically working
towards, I was able to able to generically foreshadow what
was to come about for Rook and DomainSponsor, as well as
seeing and commenting on the signs that similar processes
were underway at other monetization providers in the
industry.

As major of an event that the
acquisition of DomainSponsor by Rook Media was, combining
the number 1 and 2 monetization platforms, respectively, in
the industry together, it was certainly not the only
event of its kind in 2014.

There were number of changes to
the strategic terrain of the industry all through the year,
leaving us with a much different playing field at the end
of 2014 than at the beginning. TrafficZ’s parent,
Thought Convergence, sold and subsequently closed
down operations of the monetization business. HitFarm was
another platform to close up shop after a long and
storied history. Matomy Media acquired a
controlling stake in Parking Crew and subsequently
did a small scale IPO on the London Exchange. Many other
smaller platforms also either closed
down, attempted to sell but were not able to find
a suitor, and/or reduced operations and offerings
to clients.

The full affects of a variety changes and improvements
on the advertising affiliate side of the business, such as Google’s
CAF changes and implementation late in 2013, drove the
strategic dynamic and really forced the all the participants
to adapt for the better, or move out of the space. On the
balance, the resulting maturation of the
remaining participants and monetization segment itself,
have led to an overall better industry outlook starting 2015 than
we left 2014 with. Earning trends have stabilized and now improved
over 2013 for the bulk of the quality portfolio owners.
Affiliate Advertising relationships continue to be made and
existing ones strengthened, offering more
variety and flexibility in monetization for
clients. Synergies of the combinations and lessons learned during
integrations are being leveraged and are resulting in better
offerings and services for clients. I see 2014 as a banner year
for our industry and one that points to many good things to
come, notwithstanding some structural speed bumps in our path
as we continue to move forward.

With full
realization that my answer to this and last years 2014
review/outlook, might put a high bar on an expectation of some
prophetic knowledge to be gained, I have
to reluctantly admit that I don’t
have anything immediately pending that is quite on the
scale of last year’s activities to forecast 2015’s
outlook with. While we certainly are still working on
many potential strategic partnerships to solidify our place
in the market, and expect and hope to be a part of some of the
necessary and continued consolidation in the industry, I feel the
full the bulk of the attention on progress in 2015 will be
caught by the continued organic maturation of the industry.

The landscape will
continue to change, with modifications in the terms of
monetization on some devices looming on the horizon
on the affiliate advertising side, as well as the
resulting opening this will provide for the continued growth
of additional and alternative means of monetization. If
anything near the investment that went into acquiring
the rights to the various new gTLDs goes into marketing
and developing of them, we could and should see this
as a source of new growth in direct navigation and
monetization.

Without a doubt,
2014 and the changes coming this year have shown us that the old
mantra that 6 months in the domain industry is like 2 years in
many others, holds as true now as it ever did. As much as the
industry maturation in 2014 lead to many improvements in
the core elements of domain name monetization, even more
and broad reaching change is needed. Existing platforms
and their technological basis, current partnerships and the
resulting value add for customers, as well as the
various assumptions surrounding the fundamentals of how
quality sustainable monetization is best achieved, all need
to continue to evolve, be retooled and/or rethought
and fashioned into the form best fitting the emerging challenges.
The requirements in evolving to meet these challenges
will continue to weed out the weaker, less prepared and
devoted participants, leaving the more dynamic and adaptive
platforms in place.

We at Rook and
DomainSponsor are working hard towards being in a solid
position to offer significantly improved and tailored
solutions to our clients, whether
sourced internally or leveraged from our strategic
partnerships. Expectations are high that 2015 should increase
the tempo in the positive development of
our industry, with benefits for both the immediate and
the long term, as the continued maturation and new strategic
consolidations and partnerships streamline and improve the eco
system for all.

There
are only a handful of veteran attorneys in the world who really
understand the domain space inside out. New York City based Karen
J. Bernstein of BernsteinIP.com is one of those elite
few that domain owners turn to when their assets are on the
line.

Karen
Bernstein

The domain
industry saw an increase in stolen domain names in
2014. It appears that hackers/thieves are getting more
sophisticated at breaking into registrants' e-mail addresses
and then taking over the administrative functions so the
domain names can be transferred away from their rightful
owners and sold on the open market to unwitting buyers.

The New
gTLDs were also prominent in 2014 and, in particular,
the launch of geo gTLDs like .NYC and .BERLIN,
which are showing an increase in registrations. With
all the hoopla over the URS
in 2014, there were only about 87 URS domain disputes
over New gTLDs filed at the National Arbitration Forum,
one of two ICANN appointed providers.

In 2015 you
will probably see more registrars touting two-factor
authentication and other security methods in an attempt to
mitigate domain thefts. The rise in instances of
online security breaches for large companies like Sony,
however, could prove to be a challenge for securing your
domain names.

Financially, with
back end providers gobbling up New gTLDS and Web.com's
acquisition of SnapNames, we will probably see more
consolidation in the industry for 2015. And we may start
to see Dot Brand TLDs (like .AXA and .Canon)
marketing their services to the public, which could increase
public awareness of New gTLDs which, in turn, may help the open
New gTLDs gain traction in attracting more registrations.
With respect to domain disputes over New gTLDs, I believe
that UDRP cases will continue to outpace URS proceedings in
2015.